Shares in the Chinese cement and steel sectors have surged for 13 consecutive days since November 5, when the central government announced its 4-trillion (US$586 billion) economic stimulus package to revive economic growth.
Steel shares have increased in value by about 30 percent over the 13 days, 11 percent higher than the average increase in the stock markets, China Business News reported on November 18.
Zhao Shibao, a steel sector analyst from China Merchants Securities, said that demand for steel might increase by 88 million tons next year as central government plans to invest 2 trillion yuan in railway construction and 1 trillion yuan in reconstruction in earthquake-stricken areas.
According to Piao Zhongdong, an analyst from Sealand Securities, the country will require 400 to 480 million tons of cement in the next two years.
The stimulus package will be spent over the next two years to finance 10 major programs, including low-income housing, rural infrastructure, transportation, environmental protection and rebuilding of disaster-hit areas.
Central government's budget for the 4-trillion stimulus package:
According to experts from the State Gird, the country will invest 1.1 trillion yuan to build 260,000 kilometers of cable carrying electricity load of 110 kilovolts.
It will also invest 400 billion yuan in building 50 new airports and renovating 90 old ones.
The country will also invest 10 billion yuan in the construction of transportation infrastructure in the fourth quarter of this year, followed by 1 trillion yuan over the next two years.
600 billion yuan will be invested next year in the construction of railways, and 20 billion yuan in the fourth quarter of this year to build more facilities for water conservation.
Yangjiang Nuclear Power Plant in Guangdong Province, and Qinshan Nuclear Power Plant in Zhejiang Province, will be expanded through investments of 95.5 billion yuan and 93 billion yuan respectively. Investment will also be directed into west-to-east gas transmission and the construction of a large oil refinery in Chengdu, Sichuan Province.
The country will also invest 900 billion yuan in the construction of 6 million low-income houses over the next three years.
(China.org.cn by Wu Jin, November 18, 2008)